Marks & Spencer has reported another year of ailing finances with a 62.1 per cent plunge in annual pre-tax profit, which it mostly attributed to costs linked to its five-year turnaround scheme.
For the year to March 31, pre-tax profit at the department store dropped from £176.4 million to £66.8 million after it incurred a bill of £514 million in exceptional costs.
The costs were linked to M&S’s turnaround scheme, and included £321.1 million from its UK store closure programme – which it updated yesterday with a further 14 M&S clothing & home stores, bringing its new total target to 100 stores closed down by 2022.
On an adjusted basis, pre-tax profit fell 5.4 per cent year-on-year from £613.8 million to £580.9 million.
Meanwhile, profit after tax slumped 74.8 per cent to £29.1 million, down from £115.7 million the year before.
However, total group revenue rose 0.7 per cent year-on-year from £10.62 billion to £10.69 billion, boosted by 3.9 per cent rise in total sales from its food arm.
Despite this, comparable food sales were down 0.3 per cent.
M&S’s embattled clothing arm also continued its weak performance after it saw like-for-like sales fall by 1.9 per cent in the year while total sales dipped 1.4 per cent.
The retailer said its annual revenue was negatively impacted by unseasonal weather conditions, but at the same time it benefited from an earlier-than-usual Easter timing.
While the retailer’s UK operations experienced a 0.9 per cent dip in like-for-like sales, on a total sales basis it edged up by 1.8 per cent.
International revenue dropped 10.2 per cent but profit before adjusting items more than doubled to £135.2 million.
M&S said this reflected the closure of stores in loss-making owned markets and the sale of its operations in Hong Kong to a franchise partner at the end of December.
Finally, the retailer’s net debt reduced by 5.5 per cent year-on-year from £1.93 billion to £1.83 billion.
“At our half-year results in November, I outlined the need for accelerated change at M&S,” chief executive Steve Rowe said.
“The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short term costs which are reflected in today’s results.”